Thanks Endless. Bazinga, sorry to hear of your trading troubles. It's scant consolation but this has been the toughest year since 2008, in my opinion. You're not alone.
Half-time round-up:
Australian shares have suffered their heaviest hit in more than a month after resource stocks were pummeled by overnight declines in commodity prices.
At lunchtime the ASX 200 was down 44 points or 1% at 4312 and on course for its biggest reversal since a 71-point plunge on July 23. Resource stocks were the main victims after the price of iron ore hit a fresh three-year low overnight, dragging Rio Tinto to its weakest level since July 2009. The gold sector fell 3.7%, metals & mining 2.9%, materials 2.6% and energy 1.6%. Health +1.2% and telecoms +0.6% were the only sectors to advance.
"Iron ore is getting hit pretty hard at the moment," Rivkin Securities analyst Tim Radford told Fairfax. "There could be further downside for iron ore companies in the short term, given the amount of pessimism that's emerging in the iron ore sector with concerns over future demand from China... The issue is China has increasing stockpiles and their supplies could be quite high for the next months to a year."
Most Asian markets declined as Japanese retail sales and South Korean business confidence reports disappointed. Retail sales recorded their first reversal in Japan in eight months, dropping 0.8% in July from the previous year. Hong Kong's Hang Seng fell 1.06% and Japan's Nikkei lost 0.74%. The Shanghai Composite bucked the downtrend, rising 0.15%. Dow futures were recently down 32 points or 0.2%.
The morning's domestic economic data was mixed, with capital expenditure beating expectations but building approvals suffering a major fall. Private capital expenditure increased by 3.4% last quarter versus predictions for a rise of 3%. Building approvals last month were more than three times worse than economists expected, plunging 17.3%.
Crude oil futures gave up another 14 cents this morning to US$94.98 a barrel. Spot gold was $1.20 weaker at US$1,657.50 an ounce. The dollar was buying $US1.0327.
Plenty of red flags this morning. With Bernanke unlikely to spring any surprises tomorrow night, traders are taking money off the table pronto. It will be very interesting to see if the recent revival in speccies survives any significant pullback in the broader market. Still, where there is panic selling, there is opportunity so I had my busiest morning in weeks. Began buying IMD too soon but there was enough room in that plunge to get in lower and eventually turn a healthy profit. PCL and ASL also delivered from the lows. Still have some FAR and LNG to get away.
